Skip to main content

tv   Mad Money  CNBC  December 6, 2012 6:00pm-7:00pm EST

6:00 pm
the next two days. >> the option strikes get adjusted. >> karen? >> citibank, it might be time. >> dr. j. >> i'm going to be in nokia because the 48,000 options out in january 2014. >> all right. i'm melissa lee. thanks for watching. see you tomorrow. back here again at 5:00 for "options action" followed by "money in motion." "mad money" with jim cramer starts right now. i'm jim cramer, and welcome to my world. you need to get in the game! going out of business and he's nuts! they're nuts! they know nothing! i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm just trying to help you make money. my job is not just to entertain, but to teach, to coach and demand tonight. call me at 1-800-743-cnbc.
6:01 pm
memo, memo to the president and congress -- ♪ you are now screwing up this fiscal cliff stuff royally with your hard line positions and your ridiculous protestations that you can't compromise. here's why. we are close, very close right now within our grasps to becoming the leader of the world when it comes to technology, innovation, natural resources, and finance. you are the only thing standing in our way. you are our ball and you are our chain. like today dow rallies 40 points, s&p gained .33%, nasdaq .52%. whether it's the ceos of the honeywells or the smallest of the small. tonight's guest of lumber liquidators, they're mean-spirited debates, the pledge is not to raise taxes,
6:02 pm
it's costing this nation a once in a lifetime opportunity to reassert itself as the leader of the free world. and faster growing the repressive communist world to boot. you are in the ability to give us a deal, any deal is crushing our economy. allow me to explain. since i read @jimcramer on tw twitter people say i'm biased. i believe that the compromise that all the common sense people are looking for, some combination of spending cuts, higher taxes and pro-growth initiatives doesn't come into play anymore in washington. too many pledges, too much ideology. i l am part of the 2% that's going to have to pay more. i have the highest effective tax rate possible, 48% for a variety of reasons. but i am willing to pay more because i used to pay more at one time and i'm grateful for what this country has done for me. i know that those of us are lucky enough to have done well in this country have had a really good run and it's time to
6:03 pm
show gratefulness, even if we think the government may be profligate with our money. enough already! i want others to do well too. so don't get the idea -- i'm not against the next guy doing better. the idea is that the small business person that everyone claims to be looking out for and the middle class people everyone pledges to, they do need a chance. but here's what the polls are missing, we are seeing rumblings if washington would stop intruding and go away and agree to a sacrifice. i know some are saying the president's taking a hard line. and i was none too happy with the press conference. if democrats don't get their way, i was preplexed by the rhetoric. as perplexed as grover norquist, the unelected head of the republican party can insist that voting for any tax increase after pledging to his organization not to vote for a tax increase is a death sentence for your political career. listen up, washington, we get a deal, any deal at this point we could have an economic boom that
6:04 pm
would make the benefits of even a bad deal done far outweigh the cost small business to the middle class, subchapter "s," or the benign new code for rich people that republicans are using. the 2% would be able to make major gains in their wealth again, much more than they would pay in taxes. the middle class will be more upwardly mobile and more able to pay the outrageous tuitions for college as well as saving for retirement, the two biggest challenges most people face. their 401(k)s, i.r.a.s go up in value more than enough. dividend increases in your "mad money" accounts, remember, that's discretionary. and you rein in the entitlements, make it so our kids won't be dealt a hand so hard that it doesn't matter how hard it is or how much work, they can't make the money. can someone tell the president this? can someone give grover norquist a heads up, this is people. but about raising the standard of living for everyone. it's not just about paying some
6:05 pm
government to have more but about putting millions to work who are now jobless because that's what happens in a boom. we put them to work. and, yes, spending's got to come down. are they so obtuse, to quote andy dufrane that they can't see this? and, yes, i'm talking about both sides. it's driving me crazy. how do i know that things would be so great if we could only get beyond the stupid politically created crisis? let's go over the reasons. first, in terms of how well we could be doing, think about this. the barely capitalist don't innocent that is europe has settled down into some sort of permanent no-growth mode and yet almost every one of the stock markets is doing better than ours. come on, washington, that's ridiculous. how can the markets in switzerland, netherlands, germany do better than us? how is that possible? because of you, washington. it's because of you. we've been kept back all because of you.
6:06 pm
second, before our politicians stepped in with the intransigence and anger, we were about to have an explosion in earnings. retail was stronger than it was in a decade, autos back incredibly robust. and that's just the beginning. because all the pent up demand. we're running short of office buildings, shopping centers, apartments, homes, these are the hiring sectors, all this blather about helping the small businessman of subchapter "s" for private and middle class, you want to help them? give them a deal, any deal, just get out of our way for heaven sakes. our country is starting to get so competitive, again, that business is building things over there now want to build them there. tim cook tells brian williams that his company's going to make macs in this country. we're better than kmochina. meanwhile our costs are plummeting courtesy of the cleaner, cheaper fuel, natural gas. so cheap here it can be lique liquefied in the united states and sold overseas. potential exporter dominion
6:07 pm
later tonight. that business unimpeded by washington could be jobs. a lot of projects on hold, though, fiscal cliff. yep, the obstacle is washington all because of the need to sock it to the 2% not the 1.5% and the over 400,000 crowd, the 1%, or the need to fulfill the anti-tax pledge of allegiance many of our congressmen made to grover norquist. he makes the other guys look like crash dummies. we're on the cusp of an economic boom in this country. but we have politicians that would rather create a recession, a mandated economic collapse, let's create a bear market versus rising above. and guess what? these enemies of wealth and job creation may get their way and win. yes, to borrow a phrase from my own rant last time we were on the brink of a washington-inspired financial disaster, they know nothing.
6:08 pm
shawn in illinois. shawn? >> caller: hello, jim. >> what's up, chief? >> caller: from chicago land. >> done. speak to me. >> caller: -- for some time now, and i just heard a report that their sales revenue from call of duty black ops 2 has topped $1 billion in 15 days. and for the entire "call of duty" franchise has surpassed even "star wars." that's huge, and my question is, they've been trading sideways for a few years now. is this the catalyst we've been looking for to see some growth? >> no. here's why. see, when everyone knows something like the fact is i'm reading here on the "wall street journal" blog, "call of duty" hits $1 billion in retail sales. when everyone knows something, it ain't happening. it means that's already in the stock, at $11.36, everyone's read that story, you've got to have something else to get it higher. like if it turns out it's $2
6:09 pm
billion. no, we're not going to buy it on the basis of news that's already in the stock. mike in texas, mike? >> caller: hey, jim, thanks for taking my call, thanks for your enthusiasm, entertainment, and stock insight. >> thank you. >> caller: i wanted your quick thoughts on pimco. they preannounced results yesterday and got hammered. >> yeah. >> caller: given the exposure to cloud computing, is there an opportunity to buy at a discount. >> yeah, meantime, delivered a darn good quarter. so i say to myself, all right, no, tipco, that was a bad miss. i've got to wait. they're in the penalty box. i know they own the basketball team, but -- well, the ceo does. they're in the penalty box for another quarter. let's go to andrew in florida. andrew. >> caller: professor cramer, got a gorgeous sunny florida boo-yah for you. >> miserable weather up here, but you did give me tenure, i feel better already. so what's up?
6:10 pm
>> caller: nothing. i was wondering, today i rung the register on my starbucks holding and considering picking up some lulu, i have heard about the company expanding out as far as asia. i was wondering what you think about lulu right after the earnings. >> in terms of like not. look, starbucks is real good, and lulu is good, i would have held on to the starbucks. you wait for some senator to get on tv and tell us we don't know what we're doing and going over the fiscal cliff and he's real upset and angry and stuff and then the stocks won't go down 10% because of that senator or congressman or that treasury guy and then you get a chance to buy high-quality companies kept down for washington. let's wait for the next gas bag to grab the mike and we'll get them cheaper. in washington, will you please get out of our way? we've got a genuine boom brewing if only washington would rise above and set it free. "mad money" will be right back. coming up -- fueling the future? there's new data out about the
6:11 pm
positive impact of natural gas on the u.s. economy and employment. could exporting this domestic power be our ticket to a bright future? and how could you hop aboard the trend? tonight, cramer drills down on the issue with dominion resources ceo. and later, agita over apple. while the most coveted gifts, weigh on investors. should you step in now? or is the worst still to come? don't miss cramer's take. plus -- welcome home? you've seen the headlines. the housing market appears to be roaring back to life. but if you think you've already missed the move, think again. tonight, cramer's sitting down with the founder of lumber liquidators to find out if increased home sales and efforts to rebuild after hurricane sandy could drive it higher. all coming up on "mad money." don't miss a second of "mad
6:12 pm
money." follow @jimcramer on twitter. have a question? tweet cramer. #madtweets. send jim an e-mail to or give us a call at 1-800-743-cnbc. miss something? head to [ male announcer ] what can you experience in a seat? inspiration. great power. iconic design. exhilarating performance. [ race announcer ] audi once again has created le mans history! [ male announcer ] and once in a great while... all of the above. take your seat in the incomparable audi a8.
6:13 pm
take advantage of exceptional values on the audi a8 during the season of audi event.
6:14 pm
6:15 pm
here in the united states, we're sitting on titanic amounts of energy that's both cheaper and cleaner than coal or oil, talking about natural gas. but we end up burning off millions of cubic feet of it a day because we don't have enough demand since our government refuses to support embracing nat gas for service vehicles. while we probably aren't going to use it ourselves, last time we got good news in the form of a government report. commissioned by the department of energy that gave its blessing to the idea of exporting the fuel via liquefied natural gas terminals, it's a positive for the natural gas stocks. maybe the biggest beneficiary and you might not have thought of it, dominion resources, letter "d."
6:16 pm
it's a major utility for providing electricity to customers in west virginia, pennsylvania, and north carolina. the company used to have an oil and gas business but sold that off years ago at the top. dominion now is a gas ticker as they hope to build an export facility in maryland and it seems more likely this project will be approved in the wake of yesterday's pro nat gas report. the company has a history of raising the dividend to boot. and because it's a utility, you don't have to worry about the impact on the fiscal cliff because utilities are as consistent as it gets while we know business itself is very skittish from the cliff and this company has a lot of business clients. the chairman, president, and ceo of dominion resources to hear more about where a company's headed. welcome back to "mad money." >> jim, it's great to be with you. >> let me ask you point-blank, were you surprised? did you think there was a chance they would say no? >> actually, i didn't. i think the -- there have been a lot of studies done about potential exports, all by other outside entities.
6:17 pm
they'd all come out and said there are economic benefits from it. this report's done by a very, very credible analytical agency, done a lot of work for lots of agencies and companies for many years. they have a lot of credibility. and it's interesting. it says, actually, the more you export, probably the better off everybody is. >> all right. can you explain to me the economics of it? because you have a facility in australia, chevron spending $50 billion to build what seems to be something no better than what you're doing. how much of a head start do you have already versus where the other guys if they wanted to do greenfield? >> well, think about it this way, we have a pier that can handle super tankers in the chesapeake bay, we have 200 billion cubic feet on site already. we have a pipeline dedicated that goes into the heart of the shales. and we need to build a liquefier. and that by itself would cost
6:18 pm
anywhere between $2.5 billion and $3.5 billion depending on a variety of factors we're working on. that's a big investment when we already have all of the other parts of the enterprise you need. >> now, we're close to chenier. and they got a lot of partners to be able to do the buildout because there's a lot of foreign countries and company sponsors who are desperate for our natural gas. is that a route you can go so the rate payers don't have to pay the cost of this? >> rate payers in virginia and north carolina will have -- bear no cost associated with this at all. this is run through a separate subsidiary under a holding company. we have a pipeline company that has trading cubic feet of gas storage in the mid-atlantic and thousands and thousands of miles of pipelines, high pressure pipes that will lead to this site. we have a whole different business than the utility that most people think about us for. >> do you think people don't get it? i thought your stock would be up
6:19 pm
$1.50 today. are people not understanding the logistics and the head start you have over everybody in this country? >> well, we do have a headstart. we have lots of things we have to do. we're working hard to sign agreements with the folks that will actually export the gas. what we plan on doing is providing a service. we'll transport the gas to the site, we'll liquefy it and then we'll send out the liquefied natural gas out of the pipes, out to the terminal into a ship and out they'll go. we are in advanced negotiations with multiple parties on that. and hope to have those done soon. so we're working hard on that. we have -- this report from the d.o.e. was a big step. other issues we're dealing with that are site-specific. we have a ways to go. but we feel good about where we are. >> in full disclosure, i've been a long standing member of the sierra club. they at times have been pro nat gas, at times not. do you think they have standing to challenge your plans here?
6:20 pm
>> well, the sierra club is old organization that's got -- done a lot of great things. we've had a partnership with them for many years. and we've always been able to work things out with them. we haven't been able to do so so far at this site. so we're just going to keep on going ahead. i think that looks good for where we are in these things and i hope it turns out that way. >> my colleague david faber this morning on "squawk on the street" was wondering about the economics. i said, look, you guys can ship it after you can liquefy it and there isn't a country in the world, basically very few countries in the world could beat your price even after shipment. isn't that true? >> that is true. that is true. >> and number of people -- >> natural gas -- >> number of people you put to work. >> this job -- our site alone, jim, there's, you know, there's others looking at doing it. our site will create 7,000 jobs
6:21 pm
at the location while it's being built and another 15,000, at least, permanent jobs in the region. so it's great for the state of maryland, it's great for calvert county where it's located. the taxes from the project will pay for over 650 teachers' annual salaries. it will be a great economic boom to the region and we hope we get it done. >> do you think the president would ever come to cove and just say, look, this is the future for our country? do you think that could happen? >> well, we'll -- that's a great idea. we'll invite him. >> okay. last question, we're all concerned about fiscal cliff here. i know your customers have to pay. always got to get electricity. are you worried yourself, though, sir? you're a caring, thinking, businessman who probably has the most pro shareholders board of directors. >> i think all americans are concerned about it. i'm hopeful that the folks, the key players here will get together soon because the uncertainty's wearing everybody
6:22 pm
out. >> yeah, sure is. i'm so glad you came on the show. this is going to be so great for dominion, it's not up this year, it's a great buy. you have done a great job, this is going to be huge for you. thanks so much for coming on the show. >> thanks, jim so much. you want steady income, you want a stock that's not up a lot, not going to run into capital gains wall here and year end. dominion resources, tom farrell, done a remarkable job. i think it's going to be huge. stay with dominion. stay with cramer. coming up -- agita over apple, the most coveted gifts on everyone's wish list, worries of the future of this tech wonder weigh on investors. so should you step in now? or is the worst still to come? don't miss cramer's take. and later -- welcome home? you've seen the headlines. the housing market appears to be roaring back to life. but if you think you've already missed the move, think again. tonight, cramer's sitting down with the founder of lumber
6:23 pm
liquidators to find out if increased home sales and efforts to rebuild after hurricane sandy could drive it higher. plus, the fight for fashion. it's the most wonderful time of the year for many, but for retailers, it's do or die. from dress barn to lane bryant, can the retail make your holiday merry? cramer's talking to the ceo straight ahead. all coming up on "mad money." [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person,
6:24 pm
with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade.
6:25 pm
6:26 pm
has apple become the market? is it more important than the market itself? apple has become the sum total of this tape. in fact, the market seems to become the tail to apple's dog. if you ask me why the dow jones average was up nicely, i would say because apple tacked on eight points and apple's not even in one of the dow jones 30 stocks for heaven sakes. for the record, this is insane. apple's become the story, the story about the shareholders. not the products. it is driven by the chart, not the financials, it's a tale of fear, not of opportunity. >> the house of pleasure. >> right now apple's about the basic of what i fret about when it comes to investing. individuals who don't know what they own, who don't know how to value a stock and can't think straight because alas, the stock's going down when apple's going up. it was a stock to buy. now it's going down, it's a
6:27 pm
stock to sell! >> sell, sell, sell! >> the tax code says sell apple. if you own it in a taxable account, i feel you've been given a fantastic opportunity to pay a lower tax rate on your profits than you will in a few week's time. given that i think many people own apple in their taxable or "mad money" accounts, it might be in the cross hairs of the fiscal cliff. you combine the greatest capital gains generator out there of all time in the change of tax code of uncertain proportions, it's almost impossible to justify not selling. those people then impact the chart and the chart is signaled code red and causes the institutions to worry that, perhaps, the stock can bring down the performance, which brings in still more selling. >> sell, sell, sell! >> it's a vicious cycle down. it makes a ton of sense. let's talk about what can happen here. year end, 2013, it will be too late to sell to get the tax break. we'll find out, i believe, that
6:28 pm
apple's ipad sales are through the roof, including the mini, the iphone will have bigger sales than thought in the u.s. and will start taking share in china, all the big carriers will be selling it and an omg product might be on the way. the market capitalization will still be outsized versus the rest of the market and that i don't like. there's nothing you can do about the rest of the market, right? as we settled three times today, if you want to measure the selloff here, use the 12 days of christmas approach. three nikes, four price lines, eight dells, nine coaches, ten may cy's, 11 ralph laurens, 12 mattells and a partridge and pear tree and it's still a $1 billion company. it goes down $100 billion in cash and plus it's growing. the price to earnings multiple, the apples to apples method so to speak will be the lowest in the whole s&p 500. that can and is happening. valuation will get so cheap that apple will be too compelling for
6:29 pm
informed people not to own. the company's not going to sell through all of the cash and respective cash and this company is one gigantic atm machine. and guess what? the chart with the nauseating terminology will be meaningless at that point. the technology, not the technicals will again matter. so sellers, keep all that in mind. right now the calendar, the chart, the tax codes all are against the stock. four weeks from now, they're in your favor. to me, that says it might be too late to sell. and if apple dips below $500 again, it's -- >> buy, buy, buy! >> caller: hey, jim, i'm curious about how you feel about the great, efficient service company netflix since the disney licensing agreement. >> welm, i was surprised. this wasn't necessarily something that great for netflix, but people said, you know what? there's a pulse in netflix, it's not dying, and the shorts panicked and the stock is going up. me, i think if they did what my friend david faber wants them to do, close international, the stock will go through the roof.
6:30 pm
but if they keep losing cash over there, it's time to -- ca-ching. eventually it's too cheap to ignore and then it's time to take a bite, the apple dog, the market tail, it won't always stay that way. don't move, "lightning round" coming up. with the spark cash card from capital one, sven gets great rewards for his small business! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back on every purchase, every day! woo-hoo!!! so that's ten security gators, right? put them on my spark card! why settle for less? testing hot tar... great businesses deserve great rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back
6:31 pm
or double miles on every purchase, every day! what's in your wallet? here's your invoice. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn. look this isn't my first christmas. these deals all seem great at the time... but later... [ shirt ] merry christmas, everybody! not so much. ho ho ho! this isn't that kind of deal. [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. so, the 5.3-liter v8 silverado can tow up to 9,600 pounds? 315 horsepower. what's that in reindeer-power? [ laughs ] [ pencil scratches ] [ male announcer ] chevy's giving more. get the best offer of the year -- 0% apr financing for 60 months plus $1,000 holiday bonus cash.
6:32 pm
plus trade up for an additional $1,000 trade-in allowance. hurry. bonus cash ends janu 2nd.
6:33 pm
"lightning round" is sponsored by td ameritrade. it is time -- it is time for the "lightning round" on cramer's "mad money." you say the name of the stock, i tell you whether to buy or sell. play until this sound and then the "lightning round" is over. are you ready skee-daddy. john in new york. >> caller: boo-yah to ya, jim. >> i'm going to see you with a cow gardens boo-yah. what's going on? >> caller: what can you tell me about hess? here's the problem with hess. the problem with hess, it's the most undermanaged company in the world. it's split into two, and it's
6:34 pm
got great bakken assets, works between $70 and $75, right now, maybe even more, but they haven't pulled the trigger. jim in florida, jim? >> caller: jesse james cramer crazy horse from florida. i just started working the market about two years ago so i'm a newbie. i've made good 20% profits we bay and century link. i'm looking to buy more about a 3 to 1 ratio on ebay. and centurylink. give me your opinion jesse james. >> bingo, you're on, i would do the same. if it ain't broke, don't fix. you've got the right proportion and the right stocks and i bless it. jeff in florida, please, jeff? >> caller: hi, jim. hey, i'm first-time caller, big fan of you and the show. >> thank you. >> caller: and my stock is annaly capital. >> that's a tough one. mike farrell has a great team,
6:35 pm
but that is hard to own, particularly with the federal reserve keeping rates low. right now i'm on hold. robert in new york. robert? >> caller: in september, sandstone gold was riding around 13, and you were extremely bullish on it. last month you reviewed it and gave it a bearish signal. with it riding near 11.50 now, where do you see it going in the future? >> what happened is my friend and super frenzy accountant cautioned me, look, if gold does go down, sandstorm may have more risk than the ceo thought it had. but at 11 now, this one's fine. i just prefer the gld, particularly after what happened with freeport the other day when they became freeport oil and gas with a gold and copper division. pam in indiana, pam? >> caller: thank you, mr. cramer. what do you think of abt? abbott laboratories? >> that's one of the large positions for, you see the co-research director
6:36 pm
stephanie link on "fast money" today. and i've got to tell you, maybe my favorite position after starbucks. let's go to kenny in illinois. kenny? >> caller: jimmy. >> yo, yo. >> caller: my question is about this private bancorp. >> don't know it well enough. let's do some work and we will come back, always better to own that than to just say it looks good. let's go to -- i'm going to -- uh, frank in florida. frank? >> caller: hi, jim. an english boo-yah to you. tell me what you think of commerce bank shares. >> i've always liked commerce bank shares and it's in a pro-growth area. i've always surprised it wasn't taken over. it's a very well-run bank. i'm going to -- just so people know. this is kansas city, missouri, and between the chiefs and
6:37 pm
commerce bank, go with commerce. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. coming up -- welcome home? you've seen the headlines, the housing market appears to be roaring back to life. but if you think you've already missed the move, think again. tonight, cramer's sitting down with the founder of lumber liquidators. to find out if increased home sales and efforts to rebuild after hurricane sandy could drive it higher. scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.
6:38 pm
♪ mom? dad? guys? [ engine turns over ] [ engine revs ] ♪ he'll be fine. [ male announcer ] more people are leaving bmw, mercedes and lexus for audi than ever before. take advantage of exceptional values during the season of audi event.
6:39 pm
take advantage of exceptional values when you take a closer look... the best schools in the world... see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... they can inspire our students. let's solve this.
6:40 pm
that makes watching tv even better. if your tv were a hot dog, zeebox would be some sort of fancy, french mustard. just like adding fancy mustard to a hotdog makes you go "woah!," zeebox adds video, info, and playalongs to spice up your favorite shows. download zeebox free and say "woah" every time you watch tv. if you believe the housing recovery is here to stay, take a look at lumber liquidators, ll for you home gamers. we're big fans of housing related here on "mad money." it's a major retailer of hardwood floors. the kind of thing you buy to spruce up your home or building a new one. lumber liquidators has been on a huge run, about 200% since the beginning of the year, but pulling back over the last month, now about six points off of the high, in part because you have to believe people are
6:41 pm
ringing the register at the fiscal cliff so they can pay a lower capital gains rate. there's another reason, though, back at the end of october, the company reported a fabulous quarter, with earnings coming in at 46 cents a share, 12-cent beat, up 12%, we don't have a lot of double digit same store sales growers and raised guidance for the chain, stock roared after the quarter. some analysts don't think this momentum can be maintained, which is why ll got hit with a downgraded. i think this is a great story. let's check for the first time on cnbc for a company that needs a lot more visibility other than looking at that sign below -- behind home plate, the founder and chairman of lumber liquidators to find out more about how his company is doing and where it's headed. welcome to "mad money." >> hey, jim. thank you for having me. >> well, first, i want to give your company more visibility than just the dugout here when i watch baseball. your company is in 46 states, i don't see many of them around in
6:42 pm
the northeast. is there a particular concentration that i'm missing? >> no, we have a lot in the northeast. i started the company in boston. and we probably have the heaviest concentration in the northeast. we're a little bit hidden, the stores, are a little bit out of the way. but people drive to get the deals. >> lumber's up a lot. i know you do fantastic supply chain analysis. are you able to get enough lumber? my understanding there is a -- there's an actual shortage of a lot of product right now. >> well, we don't find that. maybe in some of the exotic species there could be some shortage here and there, but overall, plenty of supply for us. people have always said that from day one, are you able to get enough wood. but that's never been an issue. we have literally millions and millions of square feet of hardwood in stock. >> okay. tom, tell me what your advantage is over the home depots and the lowe's because i'm sure a lot of
6:43 pm
people say, well, wait a second, those guys have wiped out a lot of companies over time. what do you have they don't? >> well, probably, the three biggest things would be, one, price. we can be up to half the price of hardwood flooring than the home depot or lowe's. sometimes even more. we have a wide variety of stock, either in the local store or at our main warehouse that we can get to the store very quickly. you know, over 300 different types of hardwood flooring. and then probably the third and one of the most important things is our people are very knowledgeable about hardwood flooring. you come in there, get service, don't have to hunt around trying to find someone. you'll get the service, get the expertise. if you want to install it yourself, we can help you do that. we actually have a couple retired flooring guys in our call center we can call them and get help over the phone and, you know, and if you don't want to
6:44 pm
do it yourself, we can set up an installation. so price -- >> okay. do you think that -- one of the things that i was focused on was that you did slow down the number of stores that you were opening, and yet, at the same time, i think the sales have done up a lot. you're just trying to get measured growth this year? how are you approaching the idea that i know wall street always wants you to put up thousands of stores? >> yeah. but we don't really want to live by what wall street wants. we want to go by what's good for the company. we're changing around our stores a little bit, making them a little bit bigger, putting in different displays to show all our accessories like moldings and adding a whole line of tools. you'll be able to go in the store and see everything very easily and get literally everything you need to put in your hardwood floor. so we're changing -- that's been in progress for a while, so we are changing that around a bit so the new stores will be what we call the store of the future.
6:45 pm
it'll be about 400 square feet bigger than the existing stores. >> and one of the things that as i think about the products i buy to fix up things, flooring is one i never thought there was a particular name brand. which means the private label of yours could emerge to be the premier name brand in the industry. >> that's true, we have the bellawood brand which has 100-year warranty, one of the best in the industry, a wide variety of different species. and when i get into this, it was -- there were very few brand names. and we've created the brands and created the, you know, created the products to go with it. it was kind of, you know, i guess fell into a lucky industry that didn't have very many advertisers and promoting of different brands. >> right. now last question, we're very focused on fiscal cliff on our network. i have my rise above pin.
6:46 pm
is this the biggest obstacle to being able to beat numbers next year? >> fiscal cliff, well, no, i think -- what we've seen in the past in the past four years during the recession, people didn't stop doing work, they did smaller jobs. we don't sell to the big home builders directly really. most of our business is with homeowners. either doing it themselves or having someone do it. but instead of doing, you know, 6,000 feet, a whole house at once, they would buy smaller, you know, do two or three rooms at a time, one room, and over a couple of years do the whole house. so we didn't -- the overall business was still there. and if people aren't moving or buying new houses, they're going to fix up their existing house. and we've seen that's held very true over the last few years. >> all right. well, you've got a terrific story. i appreciate you coming on first. i've watched this stock be a rocket ship. i understand much better now why. thank you for coming on the
6:47 pm
show. >> thank you very much. >> that's tom sullivan the founder and chairman of lumber liquidato liquidators. i think people saying it's done or going to slow are wrong. do you care what kind of floor you get as long as it's the best looking one and the best value? that's the offer, i think the stock represents the value too. "mad money's" back after the break. coming up -- the fight for fashion. it's the most wonderful time of the year for many. but for retailers, it's do or die. from dress barn to lane bryant, can the retail make your holiday merry? cramer's talking to the ceo just ahead.
6:48 pm
i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter.
6:49 pm
6:50 pm
we are right smack in the middle of the holiday shopping season. as soon as the holidays end, we're most likely going to go over the fiscal cliff. something that could crush the consumer. all of which means it's a very confusing moment. we want to stick with best of breed that can come bouncing back whenever our leaders reach a deal. companies like ascena retail group, asna. formally known as dress barn. we've been fans because they have a terrific model. own multiple niche brands, maurice's for 20-something women, dress barn, appeals to a more middle aged woman, and charming shops, giving them two successful plus-sized chains.
6:51 pm
i believe in this deal because they have a record of making transitions work. the stock got slammed today, falling 4.3%, they delivered a four-cent earnings beat, revenues were in line, but still rose 48% year-over-year. and they reaffirmed their guidance for 2013, numbers slightly less than what some on wall street were expecting. what happened here, i think, is the stock ran 35% for the year. expectations got to elevated for some, well, they say they were disappointed. let's talk to the president and ceo of ascena retail group to learn more about the quarter and the profits. welcome back to "mad money." how are you, sir? >> nice to be back. thank you. >> we often talk about the positives that are having the big mosaic, different stores. sometimes i think wall street doesn't get it yet. >> well, the problem is, we've got five brands and they're all very different. they have different niches, and different operating cycles and not all going to be perfect at the same time. in many cases, seems like they deflect to maybe the one that's
6:52 pm
struggling the most. >> i think bbt -- all these firms do good work and i'm not slamming anyone in particular, but i know bbt asked some questions on the call that i thought were kind of benign. then they came out and said heavier promotions of justice give us pause, downgrading buy to hold. should we be paused? i mean is that a legitimate concern? >> well, you know, i don't think so, obviously. i'm a little biased, jim. >> that's okay. let's get it from the other side. >> well, you know, at justice, we're doing a new type of promo called a flash sale that has worked really, really effectively at driving incremental volume. so we get more gross margin dollars, but he's right, the percent does come down, but at the end of the day, we end up with more dollars in the bank and taking more market share because of volume we're driving. we think that's a successful strategy. and on the missy side, clearly the missy customer is not back
6:53 pm
to the same extent she was four or five years ago before recession. and our missy brands, dress barn, lane bryant, catherine's aren't nearly as strong as we'd like them to be, although catherine's has made a comeback. >> how much was fashion? there was some thought that you missed some of the look. >> i think in a couple of areas we probably did. our dress barn sweaters were not quite what we would've liked. that was our biggest single miss. a couple other areas weren't as strong as we'd like. we're a fashion retail, you're never going to get it all perfect. and we had a lot of of other areas that did well. i think we learned from the mistakes, well-positioned going into the holiday, and i think we've learned a lot that's going to influence what we do in the spring season. >> i know some people thought you were being conservative, but there was a moment where you say, listen, i've been at dress barn for 21 christmases, i think i say the same thing every holiday season, about the need to be a little cautious. it was even though you did express caution, it wasn't
6:54 pm
saying this time i mean it. it's the same as always. >> it's what i call nail-biting time, jim. we're in that awkward period between black friday, cyber monday weekend and the real run-up to christmas. and as you may know, we have an extra weekend before christmas this year. and that may have kind of slowed people down and the warm weather. >> warm weather. didn't feel like christmas the other day. i was out without a coat. >> yeah. >> now, let me ask you, you reference in the conference call that you are taking share. so someone's losing share. now, we all know this jc penney is hobbled. i look at the values in your store versus jc penney. i don't know, i think you offer a more attractive proposition. is that happening in this country right now? >> well, i think jc penney's having their struggles. but at the same time, their biggest competitor kohl's had a tough november. >> yeah, they did. >> a little bit of a surprise. target, macy's, everybody had a tough november. that gives the industry pause. on the other hand, the numbers we're sg particularly at justice where we measure it,
6:55 pm
where we use outside data, we are taking share primarily from walmart, but from a number -- >> walmart? >> yeah, in that category. >> you can't beat them on price, can you? >> no, but they're not competing where we are. they're more the commodity business and we're the fashion business. >> okay. one of the things that i have loved about you as i mentioned in my intro, when you make the acquisitions, you do great things. is one tougher than the other? anything you found you didn't know? >> well, there's a little more hair on this one because it's bigger. when we bought maurice's it was a pure play. >> okay. >> we bought justice, it was a pure play. here, with charming, not only do they have lane bryant and catherine's which we're holding on to, but we're also winding down fashion bug and they have a small other business that we're going to maintain but probably sell in the new year. and they have a very large shared service group. so we've got the ascena share service group and the charming share service group and working to integrate them, so we've got to cut overhead and switch gears
6:56 pm
and figure out how to create synergies. that's what we're doing behind the scenes. and really, that's not the brand's concern. the brand's now can focus on their business, driving their sales, and all the stuff behind the scenes. we've got our shared service team to work on. >> okay. one last question, i was interviewing the terrific ceo of lululemon this morning. i said, listen, you're doing a lot of direct sales. a lot of electronics, internet. >> internet. >> is it making comp stores less relevant? and she said no. i have to wonder whether they are as important as they used to be. >> i think they are. because the economics of a store is still important. you still have to pay rent. so what we think we're getting is this migration to omni channel. what i mean by that is the customer comes in the store and what we're developing the ability in some of our brands to do is to -- if we're out of a product is to order it in the store and have it delivered to her at home. or if she's shopping online, and
6:57 pm
she sees something she likes, she can order it and have it delivered to the store where she can try it on and match other items to it. >> makes a the lo of sense. dave, i've got to tell you, this is the kind of decline i've been waiting for. we said, let's hope it comes in. it's coming in. david jaffe, this ascena store is a hold to buy bb & t, not buy to hold. i'd stick with this one. stay with cramer. thanks. thank you. [ male announcer ] this december, remember -- what starts with adding a friend... ♪ ♪ ...could end with adding a close friend. ♪
6:58 pm
the lexus december to remember sales event is on, offering some of our best values of the year. this is the pursuit of perfection. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn.
6:59 pm
can i still ship a gift in time for christmas? yeah, sure you can. great.


disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on